Crisis in Greece, Italy hits immigrant remittances

TIRANA, June 14 – Albania immigrants working abroad, mainly those in Greece and Italy, continue bringing less money at home because of the ongoing crisis in their host countries which has cut a considerable number of jobs. This is confirmed by the central bank’s current account statistics which showed that immigrant remittances in the first quarter of this year registered 170 million euros, 13 million euros less than the same period last year.
The January-March period of this year marks the second lowest level of remittances since 2005 after the second quarter of 2009 which was the worst ever with only 131 million euros.
Last year, immigrant remittances fell by 6.7 percent reaching 782 million euros, 52 million less than in 2008, according to central bank data.
Experts say the main cause of the drop in remittances, which are the main source of revenue for thousands of families in Albania, was the increase in unemployment rate mainly in crisis-hit Greece and Italy where more than one million Albanian immigrants live and work. Hundreds of them are already returning home after being unable to find a job for months.
Surveys show a considerable number of Albanian migrants did not go back to Greece after coming to spend their holidays last December in Albania because of lack of jobs in the neighboring country.
The return of immigrants is also indirectly indicated by the remittances in the fourth quarter of 2009 which registered a surprise 227 million euros after 131 million euros in the previous quarter.
The 2009 remittances were equivalent to 9 percent of country’s GDP. Remittances in Albania continued their growing trend until 2007 when they registered a record 951 million euros.
Experts have warned Albania will be the hardest hit country from the Greek financial crisis because of the size of Greek investments and the big Albanian migrant community there, whose remittances are a major source of revenue for Albanian families.
Albania has more than 600,000 immigrants in Greece, who make up 10 percent of the Greece’s total workforce and are the biggest immigrant community there.
According to the International Organization for Migration, IOM, nearly 26 percent of Albanian families, some 190,000, rely on remittances especially those in rural areas.
However, the 6.7 percent cent drop at this time of global crisis is not considered problematic and is better than experts expected.
Studies show remittances have served to reduce poverty in remote areas and increase investments.
The European Bank for Reconstruction and Development (EBRD) said in a recent report that Albania is particularly vulnerable to a serious Greek downturn, as the majority of remittances into Albania come from migrants in Greece, many of whom work temporarily in seasonal jobs.
The Greek crisis has also complicated Albania’s plans to issue 400 million euros in an inaugural euro-denominated bond in April, for which the parliament authorised an interest rate of up to 8.5 percent. Government is now considering borrowing from the domestic market by issuing a short-term Eurobond.